The Student LoanDown » 2012 » Novemberhttp://blogs.wellsfargo.com/studentloandown
The Student LoanDownWed, 18 Mar 2015 23:18:55 +0000en-UShourly1http://wordpress.org/?v=3.9.2Repayment Tips for Student Loan Borrowershttp://blogs.wellsfargo.com/studentloandown/repayment-tips-for-student-loa/
http://blogs.wellsfargo.com/studentloandown/repayment-tips-for-student-loa/#commentsThu, 29 Nov 2012 15:00:36 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/repayment_tips_for_student_loa.htmlContinue reading →]]>For May graduates, student loan repayment begins during November or December following a six-month grace period that is allowed on most federal and private student loans.

Although graduates may understand the value of a college degree, navigating life after college can be overwhelming for many recent graduates. Finding a job, organizing living arrangements and managing finances are just a few of the realities that recent graduates face.

Here are five steps that can help make student loan repayment simpler:

1. Use your six month grace period following graduation to get organized for repayment.

Get your documents in order—remember to keep copies of any loan documents you sign. If you will make payments to more than one entity, be sure all your loans are accounted for.

Know when payments are due and the amounts.

Set up automatic payments to ensure timely payment and protect your credit.

If you can, make payments while you’re in school. This will help save you money over time, by reducing the interest that accrues and is capitalized.

2. Consider loan consolidation, but make sure you do your research before signing up. Student loan consolidation may be a good option to consider for students interested in combining multiple private student loans into a new loan with a single monthly payment. Customers may benefit from a lower interest rate and potentially lower monthly payments. Repayment typically begins immediately, even for students still enrolled in school, and although monthly payments may be lower, you may pay more in interest over the life of the loan due to the extended repayment term. Be sure you understand the rate, repayment terms, what additional rate discounts may be available, what the cost is to consolidate and if there are penalties for paying off the loan early. Not all lenders offer the same terms, so be sure to do your research.

3. Understand your repayment options. Keep in mind, for federal loans and Wells Fargo private student loans, there is no penalty for making larger payments than the monthly required minimum or paying off the loan earlier than the end due date. With a standard repayment plan, you pay the least amount of interest over the life of the loan. For federal loan borrowers there are additional repayment considerations:

Extended repayment may be based on a fixed or graduated repayment schedule over a period of up to 25 years.

With graduated repayment you make lower payments at first, then gradually increase them.

An income-sensitive repayment is adjusted annually based on your expected income from all sources.

Choosing any of these plans means your payments are less each month, however you may pay more interest over the life of the loan.

Borrowers also may have the option to defer loan payments for an extended period of time, but need to be aware of the interest that accrues when borrowers choose to defer making payments. Below is an example of how much a borrower will pay in interest, by deferring payments for only 12 months. Think of how quickly the interest amount can grow in just a few years.

Student A

Student B

Begins making payments once the grace period has expired and does not go into deferment.

Enters deferment immediately after grace period ends. Deferment period lasts for 12 months.

Amount due at beginning of repayment

$30,000

$30,000

Length of deferment/forbearance (in months)

0

12

Interest rate on loan

7.50%

7.50%

Principal balance due at end of deferment

N/A

$32,250.00

Repayment term in months (i.e. # of payments required)

120

120

Monthly payment

$356.11

$382.81

Total payments over life of loan

$42,732.64

$45,937.58

Total interest paid (from the point at which the grace period ends)

$12,732.64

$15,937.58

Amount saved by making payments immediately upon entering repayment, rather than choosing to defer or forbear their loan payments.

]]>http://blogs.wellsfargo.com/studentloandown/repayment-tips-for-student-loa/feed/2Application Essays & Letters of Recommendationhttp://blogs.wellsfargo.com/studentloandown/application-essays-letters-of-1/
http://blogs.wellsfargo.com/studentloandown/application-essays-letters-of-1/#commentsMon, 26 Nov 2012 22:13:14 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/application_essays_letters_of_1.htmlContinue reading →]]>One of the hardest things to do is to write about yourself in glowing terms (“I’m awesome and here’s why!”). The second hardest may be to ask someone else to write about you in glowing terms (“Can you tell them I’m awesome and why?”). But both are required when applying to college and graduate school in the form of application essays and letters of recommendation.

Here are some tips on how to make both tasks a little easier:

Make a list of all your accomplishments. Include everything, no matter how small you might think it is. What might be insignificant to you is actually one additional detail that will differentiate you from your cohorts. If you have work experience, dig up your previous performance reviews. You’ll be surprised at how much you’ve forgotten that you’ve accomplished.

Don’t be repetitive. Applicants often make the mistake of restating in their essays information that has already been captured in other parts of the application. Remember instead that every aspect of the application is an opportunity for you to tell another chapter of your story – and no admissions officer wants to read the same chapter twice.

For example, MBA programs require a resume and work history in addition to asking essay questions related to your professional experience. Your resume might include a bullet about how you increased sales by 20% as a result of a new process you implemented. Rather than repeat that in an essay detailing your professional successes, you could talk about how your ability to build relationships across a complex organization and influence senior management enabled you to institute a new process with little resistance.

Quality matters more than seniority when it comes to recommendations. Ask for a letter of recommendation from someone who knows you and your work, preferably a direct manager, even if you don’t believe that person is “senior” enough. A quality recommendation from a mid-level manager will go a lot farther than an obviously generic recommendation from a senior executive.

Prep your recommender. Meet with your recommender and gently remind them all that you’ve accomplished under their supervision. Talk to them about what they might write about and provide guidance as needed. If they resist or if you are uncomfortable doing this, perhaps they are not the right person to write your recommendation letter.

Applying to school can be a long and arduous process, but a completely worthwhile endeavor. Not only will you be accepted into a top-notch university, but you will learn a lot about yourself (and feel good about all that you’ve accomplished) in the process. Good luck!

]]>http://blogs.wellsfargo.com/studentloandown/application-essays-letters-of-1/feed/0The Wells Fargo Communityhttp://blogs.wellsfargo.com/studentloandown/the-wells-fargo-community/
http://blogs.wellsfargo.com/studentloandown/the-wells-fargo-community/#commentsThu, 15 Nov 2012 19:59:02 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/the_wells_fargo_community.htmlContinue reading →]]>When it comes to college planning, we all have questions. How do I apply for scholarships? What clubs can I join in high school to get a head start on college? Should I live at home with my parents or move out? Now, the Wells Fargo Community has answers.

If you haven’t had a chance to visit, the Wells Fargo Community is a free online community that brings students, parents, guidance counselors, and financial aid advisors together to give you a variety of perspectives about college planning. You can ask your own questions in the Community or help others by answering theirs.

The purpose of the Community is to ask questions and share knowledge about education planning and financial topics. Join today to be a part of the conversation!

Are you going on a college tour soon? Check out our reviews on different colleges or see what this dad and daughter thought of their college tour road trip. If you have already chosen a school, we have a few posts about looking for scholarships for both private and public universities. Don’t see your question posted in the Community? No worries, you can create a new post and the community will help you find an answer!

]]>http://blogs.wellsfargo.com/studentloandown/the-wells-fargo-community/feed/0Home away from homehttp://blogs.wellsfargo.com/studentloandown/home-away-from-home/
http://blogs.wellsfargo.com/studentloandown/home-away-from-home/#commentsWed, 14 Nov 2012 14:55:48 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/home_away_from_home.htmlContinue reading →]]>Everyone likes to travel, but trying to get the most out of our weekend is really important. Cost of travel is usually the main concern for everyone involved. There are many sites that offer discount airfare and hotels but I’d like to suggest something that has worked well for me and my friends. Instead of staying at a hotel, consider staying at a vacation rental. Technology has made the process much easier, and has opened up the availability. Here are some tips that have worked for us:

If you are traveling with 3 or more people, vacation rentals are the way to go. Most rentals do not increase the cost if you add people, and if they do it is usually minimal. Hotels can add charges per night based on two or more people and may require additional rooms for more than 4 people.

You do not have to rent only for a week or more at a time; many will rent for less than a week. The listings include a calendar that shows the cost per-night, peak season and availability. Check to see if the place has reservations around your date. If not, the owner may be willing to take a reservation for less than a week. We have had great luck with this in the past, and it never hurts to ask. Also, if you’re arriving late or need a late check-out, let the owners know early and it is usually not an issue if they don’t have anyone else coming that day. Even if they do, they can be very accommodating and may work with you. We have had great luck with this including a check-out at 9:00pm one night at no extra charge. This gave us another full day to sight-see and then take showers before the long 10 hour flight home.

There is more space to spread out in an apartment versus a hotel. The apartments have a living area and some come with balconies too. Not to mention multiple bedrooms and bathrooms to share based on your budget. There is also the benefit of multiple televisions and sometimes even stereo systems and small home theaters. If you are looking for a pool, gym, laundry facility etc. hunt around. Many apartments come with access to these amenities and many homes have them included.

Wi-Fi is included at no extra charge for everyone who stays. Again this can be a savings as many hotels charge a fee for Wi-Fi and some are charging by device. We have had full computer systems in several of the units we have rented which is nice, too. Make sure your vacation rental is connected.

Vacation rentals come with kitchens so you can cook a few meals at home to save money. Even if you can eat one meal a day at home, it can save $30-$40 a person and more during a getaway. We have always tried to eat breakfast in the rental before heading out, and have cooked full meals in the kitchens which were especially nice. If you like to cookout, many come with the use of a grill, too, which can be fun.

Location, location, location! The ability to stay in the heart of the action is an advantage too. Many hotels are popular and expensive in the desired areas and vacation rentals offer a great and affordable option. Figure out which areas you would like to visit and search for vacation rentals nearby. Most listings provide a physical address that you can check on Google maps for an exact location. Look for the proximity to public transportation if you are relying on that to get around. If you have a rental car, see about parking. Most have it at no additional cost. Also if you are into restaurants, bars, nightlife etc. check the proximity to these things, too. We usually research the desirable areas and then narrow our selections down from there.

There are options available at many price ranges. Be sure to check multiple listings and compare prices and location to make sure you are getting a good deal. Airbnb, HomeAway and Vacation Rentals by Owner (VRBO) are great options that offer protection for the renter and the owner. We have used all of these and have not had any issues. For the more adventuresome, Craigslist offers some great deals on vacation rentals direct from the owner. These are usually a bit cheaper because there is not a middleman. I would suggest that you only consider vacation rentals that have pictures. The better owners will post not only external pictures but also of every room including the bedrooms bathrooms and any amenities. They will include pictures of the size of the bed in the bedrooms, so you know that if they say there is a queen-size bed it is a queen-size bed. If the owner does not have, or is not willing to provide pictures, that could be a red flag. Also, if the owner asks for full payment upfront or an unreasonable deposit to hold your reservation, I would be leery.

As I have said, vacation rentals have been very good to me and I swear by them when I travel overseas. They provide a significant savings and have been very nice places in great locations. Be sure to make a list of what you require to help with your search. Also, the owners are wealth of information on the “local’s” point of view on where to eat and where to go. Many are also able to give you economical airport transfer advice and some will even pick you up for a small fee. We have had great luck with vacation rentals, so the next time you are looking for a way to save money on your next vacation, try a rental over a hotel.

]]>http://blogs.wellsfargo.com/studentloandown/home-away-from-home/feed/0How parents can help with scholarship searcheshttp://blogs.wellsfargo.com/studentloandown/how-parents-can-help-with-scho/
http://blogs.wellsfargo.com/studentloandown/how-parents-can-help-with-scho/#commentsFri, 09 Nov 2012 16:47:56 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/how_parents_can_help_with_scho.htmlContinue reading →]]>November is National Scholarship Month. As a parent, there are ways you can help your student when it comes to securing scholarship money for college.

Keep your eyes peeled for opportunities. Not all scholarships go to just the star student or athlete. Keep your eyes open for scholarship opportunities at your workplace, through organizations where you’re a member, places where you volunteer, etc.

Share your financial picture. Be sure that your student is invested in the financial end of the college-planning process. Share the yearly cost, what student loans may need to be taken out to cover it, the interest rates, the monthly payments – all the details. This doesn’t need to be done in a way that’s disheartening to your student, but more to help them understand the importance of any scholarship money that can be had. Students are busy during their junior and senior years, and filling out scholarship applications is an easy thing to push aside when homework, jobs and activities are filling their time. Help them understand that taking time for scholarship applications is worth the effort.

Encourage organization. Again, with their busy lives, it’s easy for students to let their scholarship applications to get lost in the shuffle. You don’t need to step in and handle it, but encourage your student to figure out a way to organize their scholarship search and application process.

]]>http://blogs.wellsfargo.com/studentloandown/how-parents-can-help-with-scho/feed/0Want to take a test-drive?http://blogs.wellsfargo.com/studentloandown/want-to-take-a-test-drive/
http://blogs.wellsfargo.com/studentloandown/want-to-take-a-test-drive/#commentsTue, 06 Nov 2012 18:29:50 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/want_to_take_a_test-drive.htmlContinue reading →]]>One of the things that I’ve always done to manage my finances is now being built as a tool for all Wells Fargo customers, and you have a chance to try it out and influence its final design. The Cash Flow Monitor is now accessible to our customers through our innovation labs website. It imports all of the information available from your Wells Fargo accounts to help you see when you will have some extra money to move into your savings account for that guitar that you’ve been eyeing, your next road-trip, or maybe a start-up fund to help you move into your first apartment. It also helps you see when you will be low on cash with enough warning to actually do something about it.

The Cash Flow Monitor works like this: it lays out, in calendar form, all of the upcoming bill payments that you have in your Online Bill Pay, money transfers that you’ve already scheduled, and pulls all of your direct deposit history to estimate when your next paycheck will come in and how much it will be. You can add in other expenses that you are aware of, like extra money coming in or checks that you have written that have not yet cleared your account. Your daily balances will show up in black if all is good, low balance days are highlighted in orange, and any days that you’re running a negative balance will show up in a bright warning red. (You can set the ‘low balance’ warning level yourself to whatever dollar amount makes you pay attention).

Right now, this tool is still in development, and our friends in the lab would love to hear what you think of it. If this sounds interesting, please log in, experiment with the tool, and give us your feedback. After trying this myself, I can say that it beats the heck out of my home-made spreadsheet planning, and is even easier to set up than Mint.com.

How do you currently manage your finances? Would you like to see a tool like this in addition to the other money management tools we already offer?

]]>http://blogs.wellsfargo.com/studentloandown/want-to-take-a-test-drive/feed/2Could you borrow less for college?http://blogs.wellsfargo.com/studentloandown/could-you-borrow-less-for-coll/
http://blogs.wellsfargo.com/studentloandown/could-you-borrow-less-for-coll/#commentsFri, 02 Nov 2012 15:16:14 +0000http://blogs.wellsfargo.com/StudentLoanDown/2012/11/could_you_borrow_less_for_coll.htmlContinue reading →]]>It’s something to think about. I recently advocated for taking a look at your personal expenses to see if you could cut your monthly bills.

As the end of this semester approaches, you may want to consider taking a look at your school-related expenses to see if you can realize some savings.

At my alma mater, students graduate with some of the highest levels of debt in the country, unfortunately. However, in the last few years, the three major universities in my state have created financial counseling programs that officials say are helping reduce student borrowing. It seems to be working, as a recent national study showed an $845 drop in the amount owed by the average 2011 Iowa college graduate. Check out this article, which tells more of the story.

In the article they mention an important point to keep in mind when borrowing for college: just because you can borrow a certain amount, doesn’t mean you should. We’ve said it before, but I’ll say it again—borrow only what you need for college, no more.

And that brings me to my suggestion to take a look at your school-related expenses. Is everything you’re paying for right now a “need?” For example, are you using your meal plan to its fullest extent? If not, you may want to make some type of switch next semester to save some money.

How about your living arrangements? Could you consider any place less-costly? If you’re considering moving off-campus, do the math first to see if it’s cheaper than on-campus housing.

Do you have a car at school? Consider whether parking and gas costs are eating into your budget. Maybe you could live without it.

When you add up all these types of expenses, making a few changes could end up saving you a significant amount, especially when you multiply it over the course of several semesters and consider the interest it would have gathered in repayment.